FOR SALE: Capcom

You don’t really associate those two words with much of anything we write about in gaming journalism. Even as mainstream as gaming has become, most of what we think of as major events in the gaming industry come and go in the cultural consciousness without much, if any, recognition whatsoever. Even what I’ve been given the privilege of writing about here, Capcom’s apparent decision to hit the open market and find out what they’re worth, needs the proper framing in order to convey the gravity of what is most likely about to happen.

“Microsoft gets Capcom” or “Sony gets Capcom” would still be lost on people, and even to us, it just sounds like a sign of the times, another big company swallowing up another slightly less big company.

“Nintendo gets Street Fighter” or “Sega gets Resident Evil”, however, is a language everybody understands, and at least starts to shed light on what’s actually at stake here.

Regardless of what you might think of their practices in recent years, there’s no denying that whoever gets Capcom will be loading up with some of the most talented developers and some of the most storied IPs in the industry today. Simply put, companies of this quality just do not become available. Under normal circumstances, the subject doesn’t even come up outside of the most extreme “what if” scenarios presented by overzealous fanboys. What we have here is a chance for one company to make those fanboy dreams come true.

This isn’t going to be about why Capcom is up for sale, if it’s financial issues or the Tsujimoto family losing interest or whatever. Rather, what I want to do here is present a list of potential suitors for Capcom, along with why they would do it and what the results might be. Obviously, the big three all must be in the conversation. Any one of them that abstains would be derelict in their duty to their platforms for doing so. Even those who couldn’t realistically take on the purchase, or wouldn’t be serious about the IPs that are up for grabs, would still want to drive up the price to the point that whatever competitor does win the Capcom sweepstakes hurts like hell for having done so. As for third parties, there’s no shortage of potential buyers there, but it would have to make sense. I’ve selected three favorites out of that mix. (So there’s my pre-emptive answer to the inevitable “Where’s EA?” EA buying Capcom does not make sense for either side.)

Let’s start with the third-parties.

Maybe Sega can get Capcom. They got Atlus after all.

Sega

The context: Sega is certainly a company on the rise, finding new life as a third-party after abandoning the hardware market and going through a merger to officially regroup as Sega Sammy Holdings. Now that Sega’s Dreamcast-era problems are long gone and the company is running strong today, they’re occasionally prone to showing off the fact that they have money on hand and are willing to use it, whether it’s in funding ambitious mass-media endeavors, paying up for high-quality production value in their games, or gulping up the occasional big-name company out from under their former competitors at Nintendo, Sony, and Microsoft. Just a little something to keep in mind.

Why they would do it: Sega’s relationship with Capcom at the moment is very much indicative of the “competitors but not adversaries” direction that the industry started down when we started seeing collaboration titles like Capcom vs SNK. They’ve done some cross-promotions and collaborations over the years, and their IP selections are very similar. Sega has also shown a particularly hawkish streak of late, picking up Atlus last year when hardly anyone even had them in the running. One thing that gets brushed under the rug about the Atlus deal is that Atlus was only available to buyers that would take (and pay for) their parent company, as well. Sega did that. This is a new Sega, clearly; one that has the money to bolster their developer and IP arsenal and the will to spend it. What will they do in what will surely be a bidding war with the big boys? Better believe we’ll find out, because Sega has to be in on this, win or lose.

The immediate fallout: The internet might be an uninhabitable environment for a few weeks while that insufferable lot still in denial about Sega’s exit from the hardware market start calling for their return. The only problem is that they might actually have a point if it comes to this. (More on that in a moment.) However, in the short-term, don’t expect a Sega purchase of Capcom to profoundly affect either company’s offerings. Both would go on with their current projects and commitments, only now doing so under the same banner. One change that might be made is that would-be Capcom projects that had the legs cut out from under them by the likes of Keiji Inafune and Jun Takeuchi could find new life under Sega boss Hajime Satomi. Darkstalkers 4, perhaps?

The long-term implications: If you were to withdraw the combined catalog of Sega, Atlus, and Capcom from the current systems, the results would be devastating to all three third-party lineups. Granted, going into the hardware business is an expensive proposition even compared to procuring a heavyweight company like Capcom, so all jets should remain cooled at this time, but there would be no denying that the lineup of exclusives would make such a theoretical system very attractive. Also, don’t be surprised if the Atlus and Capcom labels were to get phased out, as there would be no point in keeping the names around purely for tradition’s sake.

Patrick says: The reason Sega’s acquisition of Atlus was such good news was because it didn’t affect Atlus’ products much if at all. Same deal here — it’s good because it changes nothing. No one loses any exclusives, nobody’s repackaging Street Fighter as a third-person shooter, all projects proceed as planned. Capcom goes on as it has been, just with another logo slapped on all of its products. If Sega sincerely wants Capcom (and Satomi is the only one who can answer that question), then it’s hard to say they won’t get them unless someone bigger than them is willing to really break the bank to make it happen.

Namco Bandai

The context: When Namco and Bandai came together in 2005, it was a merger of one of the game industry’s founding members and the holder of some of the biggest and most lucrative IPs in Japan. The house that Pacman built may not look at first glance like a hungry acquisitions firm, but that’s pretty much all the Bandai half of the company is.

Why they would do it: Look back up at Sega’s section here, because that’s really a big chunk of the argument. Like Sega, Namco is on friendly terms with Capcom. Like Sega, Namco has left any potential competitive acrimony in the 1990s where it belongs. Like Sega, they have worked with Capcom several times over the years (including currently with Katsuhiro Harada’s Tekken X Street Fighter project). Like Sega, Namco’s specialty genres line up very well with Capcom’s. Unlike Sega, there’s no first-party history vaguely-some-people-hope suggests a foray into hardware, but reality suggests that wouldn’t factor into Sega’s thinking, either.

The immediate fallout: None. Whatsoever. This is as status quo as it gets with a company like Capcom up for grabs. Bandai adds another huge name to its properties, and Harada might go out for celebratory drinks with Capcom counterpart Yoshinori Ono, but it’s entirely possible they were planning that anyway and the merger just coincided. There’s a reason why all three third-parties I consider “in the hunt” for Capcom are merged entities.

The long-term implications: Some just call it a sign of the times. Big company gets devoured by bigger company gets devoured by biggest company. It’s inevitable that this will escalate, it’s only a question of how far.

Patrick says: As speculation goes, I would put the suggestion that Namco Bandai would be the most likely buyer for Capcom right along with the suggestion that Tetris is the greatest game of all time. It’s entirely possible, but the motivation behind the statement is most likely a desire not to make any waves. Still, don’t be surprised if they swoop in and derail everyone’s hype train.

Square Enix sure has become quite diverse. An acquisition of Capcom could round out their arsenal.

Square Enix

The context: Square Enix is a firm in transition. Recovering – it seems – nicely from the disaster that was the Yoichi Wada era, new company president Yosuke Matsuda has stepped in with a renewed commitment to the type of games that built both halves of the company, traditional Japanese-style RPGs. Meanwhile, they’re still holding onto Square Enix Europe, a rather large elephant in the room which was picked up when Wada randomly decided to outbid U2 front man Bono for the services of Eidos Interactive. (The whole thing really was as weird as it sounds.) Matsuda’s policy thus far has been to have them keep doing what they’re doing, especially after the successful reboot of Tomb Raider last year. It could be because he welcomes nontraditional acquisitions, or it could be because he just doesn’t know what else to do with them.

Why they would do it: It might sound like a strange pairing, but it would work. Following the hypothetical Sega and Namco Bandai concepts of “keep doing what you’re doing, just make money for us,” that’s exactly what Square Enix would ask of Capcom for the most part, and they’d be more certain to get it from them than the hit-and-miss SE Europe.

The immediate fallout: “Just make money for us” would probably include fast-tracking Street Fighter V, as well as Resident Evil 7, Dead Rising 4, and probably Darkstalkers 4. The really interesting IP to keep an eye on would be Breath of Fire, which was more or less jettisoned into obscurity after the dismal Breath of Fire V: Dragon Quarter tanked the brand. Breath of Fire started its life as a Squaresoft/Capcom collaboration, so don’t be surprised if a Capcom acquisition by Square Enix led to the revival of the franchise under the exact same kind of arrangement, especially with Matsuda at the helm.

The long-term implications: That all depends on how hands-on Matsuda wants to get with Capcom, but you don’t buy a company of Capcom’s vast IP vault and development talent only to repurpose them as just another JRPG team among the legions already working under Square Enix. At the same time, there would probably be further-reaching consequences than with the other third-parties on this list. The reality is that we don’t know what kind of boss Matsuda is going to be just yet.

Patrick says: Don’t get me wrong, I see these guys as a real outlier. (Meanwhile, Danreb doesn’t.) Chances are new boss Yosuke Matsuda wants to rebuild the company’s own lineup of brands (SaGa, Chrono, Seiken Densetsu, and so on) before taking on anyone else’s. The thought of getting in on that Street Fighter and Resident Evil money has to be real tempting, though, and bringing Breath of Fire back home to where it began would be the cherry on top.

Now for the real fun stuff.

A Capcom acquisition by Nintendo would definitely change their kiddy image.

Nintendo

The context: Nintendo is coming off of the worst couple of years in company history, having been hit with the first losses they’ve ever known. Due largely to a confusing name and insufficient PR communication to clear it up, the Wii U has been a commercial flop. To this day, there are people out there who would gladly buy a new machine from Nintendo, if only they knew that they had made one. Under normal circumstances, their recent E3 performance would have put them over the top, but it’s hard to say that it will be enough from where they stand at the moment. To say that the Wii U is at risk of suffering the Dreamcast’s fate is excessively dramatic, however, and is still the exclusive domain of those who are in denial about the fact that the industry has moved past that sort of thing happening. It also doesn’t show the proper respect to exactly how much money Nintendo has pulled down over the years from their handheld branch, and how much more they pulled down in the last eight years because of the Wii. Nintendo’s war chest should be an industry legend in itself, and if they ever decide to start spending it, they could do some pretty scary stuff…like acquire Capcom, for example.

Why they would do it: In a perfect world, one would find the following definition under “megaton” in the dictionary. “A Nintendo fandom myth that generated when a Japanese magazine article vaguely hyped up a GameCube title, and the whole thing got blown out of proportion in the west.” The megaton jumped the shark when gaming website Spong sold out any credibility they may have ever had with an outlandish announcement, subsequently admitting that they wanted to generate a huge wave of positive publicity for Nintendo, even if patently false, in an attempt to torpedo Microsoft’s then recent entry into the game industry. Despite all of that, there exists a fringe corner of the Nintendo faithful that still believes the megaton is coming someday, and you really can’t make the case that the acquisition of Capcom and all of its assets as Nintendo exclusives would be anything short of a real megaton coming to pass. This move would change Nintendo’s fortunes overnight, and put them right back in the mix of the eighth-generation console war, both by what they gained and what they took away from their competitors. Many of Capcom’s biggest franchises also got their start on Nintendo platforms in the 80s and 90s, which would drape the news with a real sense of “coming home” for Capcom. It doesn’t hurt that Capcom has been responsible for some of the best Legend of Zelda titles in the series. Pessimists might be more inclined to make “bad cop” accusations: “Buy into the Wii U or else Capcom gets it!” Either way, it’s hard to say this wouldn’t be a panacea for what ails Nintendo.

The immediate fallout: Nintendo doomsayers would cry foul until they lost their voices. The fighting game community would also violently riot unless part of the sale stated that Capcom would fulfill its standing commitments to other platforms, including the physical release of Ultra Street Fighter IV on the PlayStation 3 and Xbox 360, and allowing Namco Bandai to develop and release Tekken X Street Fighter on Sony and Microsoft platforms. Stock in MadCatz would skyrocket as everyone lines up for Wii U Fightsticks. Outside of the fighting genre, this move would be money for both sides. Okami finds a perfect home at Nintendo. Capcom brings a massive vault of IPs with them that would give Nintendo access to a section of the mass market they’ve had trouble reaching historically. Resident Evil, Devil May Cry, Dead Rising, Asura’s Wrath, Dragon’s Dogma, and more would fill huge gaps in Nintendo’s catalogue, and Nintendo would waste no time putting Capcom to work on getting that type of content to the Wii U. A repurposed Monster Hunter could be the centerpiece of a rejuvenated Nintendo Network. The Wii U would become the exclusive home of simply too many important franchises for its current troubles to persist, and it shouldn’t take long for the Wii U to start gaining ground on its competitors once the first wave of Capcom title announcements come down.

The long-term implications: The possibilities are endless. As much as Capcom would be the cure for many of Nintendo’s problems, Nintendo may be the best equipped and most willing to facilitate Capcom doing what Capcom does best, and that is produce great video games in the purest sense. It wouldn’t even be that far-fetched to suggest that teams from both sides could form a new brand within Nintendo dedicated to keeping traditional gaming alive, much as they’ve done individually of late with titles such as Mega Man 9 and 10, The Legend of Zelda: A Link Between Worlds, and the New Super Mario Bros games. Does Nintendo have the clout to bring disgruntled Mega Man co-creator Keiji Inafune on board for a reunion with his brainchild? Time would tell. Meanwhile, Capcom brands as a whole would make up a huge part of Nintendo’s product lineup for decades to come.

Patrick says: Even after a rough couple of years, Nintendo still has a giant Wii-shaped piggy bank that hasn’t been so much as touched by the Wii U’s problems. No matter how big Nintendo’s war chest might be, however, an opportunity to pick up a company, a collection of studios, and a library of IPs as massive and illustrious as Capcom’s may never present itself again, ever. Although it’s hard to picture Satoru Iwata transforming from unassuming manager into hawkish gunslinger, Nintendo simply can’t afford not to go for it.

Sony acquiring Capcom would be very symbolic of the PlayStation brand as a whole returning to its roots.

Sony

The context: The PlayStation 4 is already proving to be a return to form for Sony, which suffered a bit of an identity crisis in the early PS3 years that they never completely recovered from over the course of the generation. Now flirting with a return to 1997-2002 levels of dominance, Sony needs to do something to distance itself further from Microsoft and Nintendo, both of which arguably got a lot more out of E3 2014 than Sony did. They’re not fighting for their relevance like Nintendo, but with people lining up to buy PS4s faster than Sony can manufacture them, they’re on the cusp of owning the industry once more, and it’s hard to say that an acquisition as big as Capcom wouldn’t put them over the top.

Why they would do it: The PSone and PS2 were both powered almost entirely by third parties, and Capcom was a real heavy hitter for them with franchises such as Street Fighter, Devil May Cry, Mega Man, Resident Evil, and Breath of Fire helping to define the PlayStation experience in those formative years. Sony Worldwide Studios have since stepped up to give the PlayStation brand the first-party presence it deserves, but players who got into the PlayStation brand because of the wealth of Japanese content it provided felt burned when the PS3 came along with its focus on franchises such as Uncharted, Resistance, Killzone, and MLB The Show. Even now, you still hear rumblings of that early PS3 era argument that “Sony is trying too hard to be western/Xbox.” Picking up Capcom and all its studios/IPs would not only put a stop to that line of criticism, it would transform Sony into an industry behemoth the likes of which we haven’t seen since Nintendo in the late 80s to early 90s. How long has it been since a console manufacturer had a selection of exclusive IPs that could compete with Nintendo’s first-party offerings? Exactly.

The immediate fallout: Capcom getting folded into Sony Worldwide Studios would be a game changer for a company looking to tighten its grip on the early lead it has gotten off to, both for what they gain and for what they take away from Microsoft. Capcom has a lot of multiplatform projects in the pipeline, and when you stamp “Only on PlayStation” on the lot of those, Sony becomes very difficult to compete with on a game-for-game basis. This would likely cut short any surge in Xbox One sales brought on by Microsoft’s strong E3 performance and the $100 Kinectomy. Sony would be wise not to let Gamescom and TGS pass without announcements of new iterations of franchises that contributed so much to the PlayStation in those early years. This might also mean turning out Street Fighter V ahead of Capcom’s implied schedule that has the game on course for a 2017 release, but more likely Devil May Cry, Resident Evil, and possibly Breath of Fire get the immediate nod.

The long-term implications: Sony’s Japanese studios of late have generally been associated with niche arthouse adventure games or underachieving JRPGs and platformers. Capcom would provide them with much more mainstream Japanese content, going a long way to bring the PlayStation brand back to its wildly successful roots. Who needs Knack when you have Mega Man? Maybe some of the minds behind Breath of Fire could repackage White Knight Chronicles‘ brilliant concept with a more broadly-palatable approach to gameplay? Devil May Cry by Sony Santa Monica, perhaps? The sky’s the limit.

Patrick says: Andrew House may not have a gun to his head to get this deal done like Satoru Iwata surely does, but it would certainly pencil the PlayStation 4 in quite early as the eighth-generation winner (they’re on the cusp of it as it is, after all). The amount of ground Microsoft and Nintendo would have to make up after a purchase like that would be nigh-insurmountable, and it’s hard to imagine Capcom going to a more fitting new home.

Microsoft getting Capcom would be a huge boost. Why not them?

MicrosoftThe context: Microsoft got off to a stronger start to their third generation than they may have had any right to after all of the horrid PR they (justifiably) received after the Xbox One’s unveiling. Their policy reversals collectively known as “One80” saved the system from being an outright non-starter, and its sequel in this year’s “Kinectomy” brings the system down to a more acceptable $399 price point. Better still, a great showing at E3 arms the Xbox One with perhaps the best 2014 pipeline of any console. Just the kind of momentum you really want to escalate. Meanwhile, the Xbox brand has historically been a tough sell in Japan, to the point that Microsoft had to mull over not only when to launch the Xbox One over there, but if they were going to at all. HMMM…

Why they would do it: Microsoft and acquisitions are nearly synonymous, as the company was effectively built upon big get after big get after big get. Moreover, when you get Phil Spencer talking about Japanese games, he sounds like only someone who grew up on the SNES and PSone can sound, so Capcom is obviously on Microsoft’s radar for that reason alone. Capcom has already been friendly to Microsoft, passing along the occasional exclusive and seeing a good return for it. Meanwhile, their multiplatform offerings do well pretty much everywhere, and if gamers suddenly had to buy Xbox in order to avoid missing out on Capcom’s offerings, that should be more than enough to reel in anyone still on the fence. The biggest prize of all, however, may very well be the ability to hold franchises such as Monster Hunter and Resident Evil over the Japanese audience’s collective head. Suddenly, the Xbox One’s fate across the Pacific looks much brighter.

The immediate fallout: Although the internet might not explode as thoroughly as it would if Capcom went to Sega or Nintendo (and the aforementioned FGC would actually remain remarkably quiet here), it’s still safe to say that we could fire up the Butthurt Express for a healthy world tour. As stated above, Japan would have almost no choice but to embrace the Xbox One at that point, but not without a healthy amount of grumbling beforehand. The truth is that Microsoft already benefits from a majority of Capcom’s output, and much of that output already meshes very well with what Microsoft themselves like to produce. The best thing they stand to get out of this deal in the short-term is closing the hardware sales gap that Sony currently enjoys, which would be worth the considerable cost of admission in and of itself.

The long-term implications: Imagining a future where the Xbox One simultaneously catches up to the PlayStation 4 and finally wins over Japanese audiences in a single move might be too difficult, even if it’s a very possible future now. A better question might be what Capcom inspires Microsoft to do. Handheld R&D? JRPG development? There’s really no telling what might happen when you combine the ambitious minds at Microsoft Game Studios and Capcom and give them all the time in the world to make things happen.

Patrick says: I guarantee Microsoft will be part of the conversation, but I get the impression that company higher-ups will be more the type to read the possible headline as “Microsoft gets Capcom” than “Microsoft gets Mega Man, etc” and thus fail to absorb the gravity of the purchase enough to allow Phil Spencer the funding to go ahead with it.

Another thing to keep in mind is that Kenzo Tsujimoto may elect to hold onto the company should he not receive a bid that he likes. This isn’t a binding auction, nobody’s saying that Capcom must go. This is, as stated once word first got out about this whole thing, simply an openness to a takeover.

So how do you even start to handicap something like this? Even I’m not sure the odds aren’t completely even among all six parties listed here (and any others I may not have taken into account). I’d say there’s more pressure on Nintendo to get this done than anyone else, while Microsoft (given management’s blessing) and Namco Bandai can build the biggest money hats. Then you realize that by that standard, you rule out Sony, Sega, and Square Enix, and that you simply can’t do that given their histories and resources. So, instead of going into some deep analysis about which scenario will play out and how, I’ll conclude with a simple, almost completely baseless prediction: